Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Amend the Rules of Its Mortgage-Backed Securities Division Regarding Membership Requirements for Unregistered Investment Pools, 67946-67948 [E6-19850]

Download as PDF 67946 Federal Register / Vol. 71, No. 226 / Friday, November 24, 2006 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period: (i) As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding; or (ii) as to which the Exchange consents, the Commission will: (A) By order approve such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. The Commission is considering granting accelerated approval of the proposed rule change, as amended, at the end of a 15-day comment period.44 IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: cprice-sewell on PROD1PC66 with NOTICES Electronic Comments • Use the Commission’s Internet comment form at http://www.sec.gov/ rules/sro.shtml or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Amex–2006–76 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–Amex–2006–76. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site at http://www.sec.gov/ rules/sro.shtml. Copies of the 44 Amex has requested accelerated approval of this proposed rule change, as amended, prior to the 30th day after the date of publication of the notice of the filing thereof, following the conclusion of a 15-day comment period. Telephone Conference. VerDate Aug<31>2005 13:24 Nov 22, 2006 Jkt 211001 submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–Amex–2006–76 and should be submitted on or before December 11, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.45 Nancy M. Morris, Secretary. [FR Doc. E6–19847 Filed 11–22–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54769; File No. SR–FICC– 2006–10] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Amend the Rules of Its MortgageBacked Securities Division Regarding Membership Requirements for Unregistered Investment Pools November 16, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on June 9, 2006, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change that is described in Items I, II, and III below, which items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 45 17 1 15 PO 00000 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). Frm 00101 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FICC is proposing to amend the rules of the Mortgage-Backed Securities Division (‘‘MBSD’’) regarding the membership requirements of ‘‘Unregistered Investment Pools.’’ 2 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change FICC is proposing to amend the rules of the MBSD regarding the membership requirements of ‘‘unregistered investment pools.’’ Currently, unregistered investment pools have essentially the same membership standards as other non-broker MBSD clearing members.4 The size of the unregistered investment pool industry has grown, and unregistered investment pools and their advisers have become significant participants in the industry. FICC believes it is necessary to reexamine its treatment of participants that are unregistered investment pools and to enhance the clearing membership standards applicable to these entities. FICC is proposing to adopt a definition for Unregistered Investment Pool, which will identify the entities that would become subject to the proposed enhanced membership requirements for such entities. Under the proposed rule, an Unregistered Investment Pool is an entity that holds a pool of securities and/or other assets 2 As noted below, the term ‘‘Unregistered Investment Pool’’ would be a newly-defined term in the MBSD’s Rules. 3 The Commission has modified the text of the summaries prepared by FICC. 4 Currently, a clearing applicant or participant that is an unregistered investment pool and whose financial statements are prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’) must satisfy a minimum financial requirement of $10 million in net assets. In this filing, FICC is making a technical change to replace the term ‘‘net asset value’’ with the term ‘‘net assets’’ to more accurately state the financial requirement. E:\FR\FM\24NON1.SGM 24NON1 Federal Register / Vol. 71, No. 226 / Friday, November 24, 2006 / Notices cprice-sewell on PROD1PC66 with NOTICES that meets the following criteria: (i) It is not registered as an investment company under the Investment Company Act of 1940, (ii) it does not register its securities offerings under the Securities Act of 1933, and (iii) it has an investment advisor that is registered with the Commission under the Investment Advisers Act of 1940, or if the investment adviser is not registered, the entity has as lock-up period of two (2) years or greater. Under the proposed rule change, entities that meet the definition of Unregistered Investment Pool will be eligible to apply to become MBSD clearing participants only if they meet the new membership criteria set forth below.5 The MBSD’s current participants that meet the definition of Unregistered Investment Pool will have one year from the date of approval of this rule filing in which to conform to the new minimum financial and qualitative rating requirements. The new membership requirements for Unregistered Investment Pools are as follows: (1) SEC Registration: As stated above, the investment advisor of the Unregistered Investment Pool must: (i) Be registered with the Commission under the Investment Advisers Act of 1940 or (ii) if it is not registered with the Commission, the Unregistered Investment Pool that the investment adviser advises must have an initial lock-up period of two (2) years or greater. (2) Minimum Net Assets: The Unregistered Investment Pool will be required to have and maintain net assets of $250 million or greater.6 If the Unregistered Investment Pool does not meet the $250 million net asset requirement, but the Unregistered Investment Pool has net assets of at least $50 million 7 or greater, then the Unregistered Investment Pool will be 5 It is important to note that entities that meet the MBSD’s definition of Unregistered Investment Pool will be treated as such by the MBSD regardless of whether the entity considers itself to be an unregistered investment pool. 6 The $250 million net asset requirement is the requirement that will be applicable to Unregistered Investment Pools whose financial statements are prepared in accordance with U.S. GAAP. Those Unregistered Investment Pools whose financial statements are prepared using other types of GAAP will be subject to the higher minimum requirements as determined by Article III, Rule 1, Section 2 of the MBSD’s Rules. 7 The $50 million net asset requirement is the requirement that will be applicable to Unregistered Investment Pools whose financial statements are prepared in accordance with U.S. GAAP. Those Unregistered Investment Pools whose financial statements are prepared using other types of GAAP will be subject to the higher minimum requirements as determined by Article III, Rule 1, Section 2 of the MBSD’s Rules. VerDate Aug<31>2005 13:24 Nov 22, 2006 Jkt 211001 eligible for MBSD clearing membership if its investment advisor has assets under management of at least $1.5 billion and advises an existing MBSD clearing participant. (3) Qualitative Rating: The MBSD will require an Unregistered Investment Pool to obtain a minimum required rating of ‘‘above average’’ as a result of an FICC internal qualitative assessment. FICC believes it is important to consider qualitative factors in order to assess both Unregistered Investment Pool applicants and members. Specifically, staff in the MBSD’s Risk Division will determine a qualitative rating for each Unregistered Investment Pool applicant. Risk staff will review qualitative ratings of Unregistered Investment Pool members on an annual basis. The assessment will include consideration of factors deemed relevant by the Risk Division, including management, capital, strategy and risk profile, and internal controls.8 The assessment will assess the strengths and weaknesses of these factors and will assign a qualitative rating to the Unregistered Investment Pool. In order to qualify for membership, Unregistered Investment Pools must meet a qualitative rating of at least ‘‘above average’’ as determined by the Risk Division’s staff. FICC believes that the proposed change is consistent with Section 17A of the Act 9 and the rules and regulations thereunder applicable to FICC because it enhances certain membership requirements and as such, assures the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible. (B) Self-Regulatory Organization’s Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. 8 Because responsibility for these factors with respect to a particular Unregistered Investment Pool may fall at the level of the Unregistered Investment Pool or at the level of the investment advisor or other third party service provider, or in some combination of these, Risk staff will perform the assessment for each factor at the level or levels deemed appropriate. 9 15 U.S.C. 78q–1. PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 67947 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period: (i) As the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding; or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–FICC–2006–10 in the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR-FICC–2006–10. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filings also E:\FR\FM\24NON1.SGM 24NON1 67948 Federal Register / Vol. 71, No. 226 / Friday, November 24, 2006 / Notices will be available for inspection and copying at the principal office of FICC and on FICC’s Web site, www.ficc.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FICC–2006–10 and should be submitted on or before December 15, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Nancy M. Morris, Secretary. [FR Doc. E6–19850 Filed 11–22–06; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10711 and # 10712] California Disaster #CA–00041 SUMMARY: This is a notice of an Administrative declaration of a disaster for the State of California dated 11/16/ 2006. Incident: Esperanza Wildfire. Incident Period: 10/26/2006 through 11/01/2006. EFFECTIVE DATE: 11/16/2006. Physical Loan Application Deadline Date: 01/16/2007. Economic Injury (EIDL) Loan Application Deadline Date: 08/16/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Riverside. Contiguous Counties: California: Imperial, Orange, San cprice-sewell on PROD1PC66 with NOTICES 10 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 13:24 Nov 22, 2006 Jkt 211001 Homeowners With Credit Available Elsewhere ......................... Homeowners Without Credit Available Elsewhere .................. Businesses With Credit Available Elsewhere ................................. Businesses & Small Agricultural Cooperatives Without Credit Available Elsewhere .................. Other (Including Non-Profit Organizations) With Credit Available Elsewhere ................................. Businesses And Non-Profit Organizations Without Credit Available Elsewhere ......................... Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. Percent The following areas have been determined to be adversely affected by the disaster: 6.000 Primary Counties: Franklin. Contiguous Counties: Florida: 3.000 Gulf, Liberty, Wakulla. The Interest Rates are: 8.000 Percent 4.000 5.250 4.000 The number assigned to this disaster for physical damage is 10711 5 and for economic injury is 10712 0. The States which received an EIDL Declaration # are California and Arizona. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008). U.S. Small Business Administration. ACTION: Notice. AGENCY: FOR FURTHER INFORMATION CONTACT: Bernardino, San Diego. Arizona: La Paz. The Interest Rates are: Dated: November 16, 2006. Steven C. Preston, Administrator. [FR Doc. E6–19875 Filed 11–22–06; 8:45 am] BILLING CODE 8025–01–P Homeowners With Credit Available Elsewhere ......................... Homeowners Without Credit Available Elsewhere .................. Businesses With Credit Available Elsewhere ................................. Businesses & Small Agricultural Cooperatives Without Credit Available Elsewhere .................. Other (Including Non-Profit Organizations) With Credit Available Elsewhere ................................. Businesses And Non-Profit Organizations Without Credit Available Elsewhere ......................... 6.000 3.000 8.000 4.000 5.250 4.000 The number assigned to this disaster for physical damage is 10713 C and for economic injury is 10714 0. The State which received an EIDL Declaration # is Florida. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008). SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10713 and # 10714] Florida Disaster # FL–00018 Dated: November 16, 2006. Steven C. Preston, Administrator. [FR Doc. E6–19876 Filed 11–22–06; 8:45 am] U.S. Small Business Administration. ACTION: Notice. BILLING CODE 8025–01–P This is a notice of an Administrative declaration of a disaster for the State of Florida dated 11/16/ 2006. Incident: Severe Storms and Tornadoes. Incident Period: 10/27/2006. EFFECTIVE DATE: 11/16/2006. Physical Loan Application Deadline Date: 01/16/2007. Economic Injury (EIDL) Loan Application Deadline Date: 08/16/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416 SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the [Disaster Declaration # 10682 and # 10683] AGENCY: SUMMARY: PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 SMALL BUSINESS ADMINISTRATION New York Disaster Number NY–00036 U.S. Small Business Administration. ACTION: Amendment 1. AGENCY: SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of New York (FEMA–1665–DR), dated 10/24/2006. Incident: Severe Storms and Flooding. Incident Period: 10/12/2006 and continuing through 10/25/2006. EFFECTIVE DATE: 11/16/2006. Physical Loan Application Deadline Date: 12/26/2006. EIDL Loan Application Deadline Date: 07/24/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. E:\FR\FM\24NON1.SGM 24NON1

Agencies

[Federal Register Volume 71, Number 226 (Friday, November 24, 2006)]
[Notices]
[Pages 67946-67948]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19850]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54769; File No. SR-FICC-2006-10]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Amend the Rules of Its 
Mortgage-Backed Securities Division Regarding Membership Requirements 
for Unregistered Investment Pools

 November 16, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 9, 2006, the Fixed 
Income Clearing Corporation (``FICC'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change that is 
described in Items I, II, and III below, which items have been prepared 
primarily by FICC. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FICC is proposing to amend the rules of the Mortgage-Backed 
Securities Division (``MBSD'') regarding the membership requirements of 
``Unregistered Investment Pools.'' \2\
---------------------------------------------------------------------------

    \2\ As noted below, the term ``Unregistered Investment Pool'' 
would be a newly-defined term in the MBSD's Rules.
---------------------------------------------------------------------------

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FICC included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. FICC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by FICC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    FICC is proposing to amend the rules of the MBSD regarding the 
membership requirements of ``unregistered investment pools.'' 
Currently, unregistered investment pools have essentially the same 
membership standards as other non-broker MBSD clearing members.\4\ The 
size of the unregistered investment pool industry has grown, and 
unregistered investment pools and their advisers have become 
significant participants in the industry. FICC believes it is necessary 
to reexamine its treatment of participants that are unregistered 
investment pools and to enhance the clearing membership standards 
applicable to these entities.
---------------------------------------------------------------------------

    \4\ Currently, a clearing applicant or participant that is an 
unregistered investment pool and whose financial statements are 
prepared in accordance with U.S. generally accepted accounting 
principles (``GAAP'') must satisfy a minimum financial requirement 
of $10 million in net assets. In this filing, FICC is making a 
technical change to replace the term ``net asset value'' with the 
term ``net assets'' to more accurately state the financial 
requirement.
---------------------------------------------------------------------------

    FICC is proposing to adopt a definition for Unregistered Investment 
Pool, which will identify the entities that would become subject to the 
proposed enhanced membership requirements for such entities. Under the 
proposed rule, an Unregistered Investment Pool is an entity that holds 
a pool of securities and/or other assets

[[Page 67947]]

that meets the following criteria: (i) It is not registered as an 
investment company under the Investment Company Act of 1940, (ii) it 
does not register its securities offerings under the Securities Act of 
1933, and (iii) it has an investment advisor that is registered with 
the Commission under the Investment Advisers Act of 1940, or if the 
investment adviser is not registered, the entity has as lock-up period 
of two (2) years or greater.
    Under the proposed rule change, entities that meet the definition 
of Unregistered Investment Pool will be eligible to apply to become 
MBSD clearing participants only if they meet the new membership 
criteria set forth below.\5\ The MBSD's current participants that meet 
the definition of Unregistered Investment Pool will have one year from 
the date of approval of this rule filing in which to conform to the new 
minimum financial and qualitative rating requirements.
---------------------------------------------------------------------------

    \5\ It is important to note that entities that meet the MBSD's 
definition of Unregistered Investment Pool will be treated as such 
by the MBSD regardless of whether the entity considers itself to be 
an unregistered investment pool.
---------------------------------------------------------------------------

    The new membership requirements for Unregistered Investment Pools 
are as follows:
    (1) SEC Registration: As stated above, the investment advisor of 
the Unregistered Investment Pool must: (i) Be registered with the 
Commission under the Investment Advisers Act of 1940 or (ii) if it is 
not registered with the Commission, the Unregistered Investment Pool 
that the investment adviser advises must have an initial lock-up period 
of two (2) years or greater.
    (2) Minimum Net Assets: The Unregistered Investment Pool will be 
required to have and maintain net assets of $250 million or greater.\6\ 
If the Unregistered Investment Pool does not meet the $250 million net 
asset requirement, but the Unregistered Investment Pool has net assets 
of at least $50 million \7\ or greater, then the Unregistered 
Investment Pool will be eligible for MBSD clearing membership if its 
investment advisor has assets under management of at least $1.5 billion 
and advises an existing MBSD clearing participant.
---------------------------------------------------------------------------

    \6\ The $250 million net asset requirement is the requirement 
that will be applicable to Unregistered Investment Pools whose 
financial statements are prepared in accordance with U.S. GAAP. 
Those Unregistered Investment Pools whose financial statements are 
prepared using other types of GAAP will be subject to the higher 
minimum requirements as determined by Article III, Rule 1, Section 2 
of the MBSD's Rules.
    \7\ The $50 million net asset requirement is the requirement 
that will be applicable to Unregistered Investment Pools whose 
financial statements are prepared in accordance with U.S. GAAP. 
Those Unregistered Investment Pools whose financial statements are 
prepared using other types of GAAP will be subject to the higher 
minimum requirements as determined by Article III, Rule 1, Section 2 
of the MBSD's Rules.
---------------------------------------------------------------------------

    (3) Qualitative Rating: The MBSD will require an Unregistered 
Investment Pool to obtain a minimum required rating of ``above 
average'' as a result of an FICC internal qualitative assessment. FICC 
believes it is important to consider qualitative factors in order to 
assess both Unregistered Investment Pool applicants and members.
    Specifically, staff in the MBSD's Risk Division will determine a 
qualitative rating for each Unregistered Investment Pool applicant. 
Risk staff will review qualitative ratings of Unregistered Investment 
Pool members on an annual basis. The assessment will include 
consideration of factors deemed relevant by the Risk Division, 
including management, capital, strategy and risk profile, and internal 
controls.\8\ The assessment will assess the strengths and weaknesses of 
these factors and will assign a qualitative rating to the Unregistered 
Investment Pool. In order to qualify for membership, Unregistered 
Investment Pools must meet a qualitative rating of at least ``above 
average'' as determined by the Risk Division's staff.
---------------------------------------------------------------------------

    \8\ Because responsibility for these factors with respect to a 
particular Unregistered Investment Pool may fall at the level of the 
Unregistered Investment Pool or at the level of the investment 
advisor or other third party service provider, or in some 
combination of these, Risk staff will perform the assessment for 
each factor at the level or levels deemed appropriate.
---------------------------------------------------------------------------

    FICC believes that the proposed change is consistent with Section 
17A of the Act \9\ and the rules and regulations thereunder applicable 
to FICC because it enhances certain membership requirements and as 
such, assures the safeguarding of securities and funds which are in the 
custody or control of FICC or for which it is responsible.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments relating to the proposed rule change have not yet 
been solicited or received. FICC will notify the Commission of any 
written comments received by FICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period: (i) As the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding; or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve such proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-FICC-2006-10 in the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-FICC-2006-10. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filings also

[[Page 67948]]

will be available for inspection and copying at the principal office of 
FICC and on FICC's Web site, www.ficc.com. All comments received will 
be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-FICC-2006-10 and should be submitted on 
or before December 15, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-19850 Filed 11-22-06; 8:45 am]
BILLING CODE 8011-01-P